DXY & Inflation data: A Focused Analysis

8 Okt 2023

previous movements :
Despite a strong bullish momentum in DXY following positive but lower-than-forecast Non-Farm Payrolls (NFP) data, the demand for the USD has not been sufficient to push the price significantly higher for the time being.
Technically:
the price couldn't break through the 107 resistance level, showing signs of significant bearish momentum in this zone. Given these technical indicators, I believe the price has the potential for bearish continuation towards my future targets. However, it's crucial to remain cautious, as the U.S. economy is still expanding. Factors such as upcoming Federal Reserve announcements, inflation data, or positive employment figures could reignite demand for the USD and disrupt the bearish trend.

Overall view
https://www.tradingview.com/x/j3JJkU7K

The latest month-over-month CPI data at 0.3% and a Core PCE decrease to 0.1% suggest easing inflationary pressures, potentially leading to a more dovish Federal Reserve stance and a weaker USD in the short term. However, the elevated year-over-year CPI at 3.7% keeps inflation concerns alive, indicating that an uptick in CPI could trigger bullish momentum in the Dollar Index (DXY).

12 Okt 2023

Nota

it's important to note that leading economic indicators like the Producer Price Index (PPI) and Gross Domestic Product (GDP) are showing positive signs, suggesting that the U.S. economy is still on an expansionary trajectory. While Consumer Confidence (CP) has been in negative territory, there are indications that it is slowly improving. This sets the stage for the Consumer Price Index (CPI) data release today, which could potentially be positive, bolstering the economic outlook. However, one area to watch carefully is core CPI, which excludes volatile components like energy. With energy prices rising quickly, there could be a downstream impact on consumers that may not be immediately visible in the headline CPI figure.
//First, a rising CPI could lead the U.S. Dollar Index (DXY) to continue its upward trajectory following the news.//
//Second, the DXY may exhibit mixed signals and enter a period of consolidation post-announcement. //